Expansion Of Domestic Demand Research Articles

Foreign Direct Investment on China's Balance of Payments

With the acceleration of China's reform and opening-up process, the macro-economy is also developing rapidly, but in recent years, changes in the internal and external situation have all been seen as factors affecting the macro-economy, how to see the situation, how to formulate a reasonable policy to cope with the problem, has become the main task of the macro-economy. The balance of payments is an essential link in determining macroeconomic development. It is related to the balance and stability of domestic and foreign wealth, of which foreign investment is an essential part of China's opening up to the outside world, and most foreign investment is direct investment. The study of the impact of foreign direct investment on the balance of payments is of practical significance. Its main strategies of a trade conflict between China and the United States and the expansion of domestic demand in recent years can put forward valuable opinions, as well as guiding significance for stabilizing the exchange rate and guaranteeing the healthy development of the macroeconomy. This paper firstly summarizes and combs the research and theories on the impact of foreign direct investment on the balance of payments; secondly, it analyzes and summarizes the data on the status of FDI in China and China's balance of payments; then it conducts the theoretical, empirical analysis based on the theory; and finally, it draws the conclusions and realistic recommendations based on the above contents.

Impact of Trade Restrictions on the Russian Forest Industry: Evidence from Siberian Timber Producers

In 2022, the Russian forest sector was severely affected by the government’s ban on the export of unprocessed timber and trade sanctions imposed by several countries. It is generally recognized that the regions of the Russian North-West are the most affected by trade barriers that have emerged. Against this background, the impact of bilateral trade restrictions on timber companies in the Asian part of Russia is not discussed. Nevertheless, the forest industry is an important sector of the Siberian economy that has an economic, social and environmental impact on the life of local communities. This paper analyzes the differences among Siberian timber companies in their response to the crisis depending on three factors: industrial specialization, scale of revenue and regional location. The results show that in 2022 the highest median revenues and net profits were generated by small firms that were focused on the domestic market and benefited from reduced competition due to sanctions. There is also evidence that spatial heterogeneity in the response to the crisis may be due to the different support measures of regional authorities and the proximity of the region to border points. We argue that the current conditions may become a new driver for the timber industry development, aimed at the growth of added value and expansion of domestic demand for wood products.

A study on factor analysis and cluster analysis for national consumption expenditure

The government work report points out that it is necessary to make the expansion of domestic demand a strategic base for development, while maximizing the potential of domestic demand. It is evident that expanding consumption, raising consumption levels and accelerating the construction of a sound domestic demand system play an important role in unblocking the national economic cycle and enhancing the main role of China's general cycle. Consumption is the main driving force of economic development, especially since the reform and opening up, China's economic development has entered a "new normal". As the standard of living of Chinese residents has increased, the overall consumption level of the population has also risen to varying degrees, making it important to analyze the consumption situation of Chinese residents. This paper uses a combination of factor analysis and cluster analysis based on the statistical analysis software SPSS 26.0 to analyses the consumption situation in each province and to determine the impact of the level of economic development on residents' consumption in each region.

Research on The Effect of Digital Finance on The Transformation and Upgrading of Residents' Consumption Structure

The effect of digital finance on the upgrading of China's resident consumption structure, at this stage of China's expansion of domestic demand, transformation and development of new momentum, economic shifting transformation is extremely important, can greatly improve the efficiency of capital allocation in the real economy, most scholars agree that digital finance can improve the consumption level of residents and optimize the consumption structure of residents, this paper from the perspective of reducing the consumption gap between urban and rural residents, narrowing the consumption gap of different income groups, breaking the consumption gap of different age groups to study the impact of digital finance on China's consumption structure.

Changing in National Infrastructure Policy: How It Affect Indonesia’s Economy?

This research would like to firstly figure out how new infrastructure policy affects national economic structure changes, and secondly figure out does the new policy effect on inter-regional economy linkage. This study uses economic structure, growth decomposition, location quotient, and linkage analysis on Input-output table to indicate national and inter-regional level economic changes between 2010 and 2016 in Indonesia. We find that economic structure generally remains the same, only transportation and real estate sector increased their contribution, this may indicate the beginning of infrastructure development stage. During 2010 to 2016, the growth was led by the expansion of domestic demand in almost all sectors, however in some sectors the technological changes have a negative contribution. Furthermore, the two most linked sectors are manufacturing and electricity sectors. Inter-regional analysis indicated that Java and Sumatera have more power and sensitivity level compared to other regions. The suggestion to booster economy development is to implement technological process and publish policy considering regional characteristics may accelerate economic equity across regions.

Перезагрузка курса на восстановление промышленного потенциала США

The article examines the effectiveness of the strategy for restoring the competitiveness of the manufacturing industry in the United States. The main vulnerabilities of the “produce more in America” policy, the course to restore and reformat broken supply chains are considered using the example of key manufacturing industries. It is stated that the policy of rehabilitation of the manufacturing industry pursued by Biden is not a unique phenomenon for the United States. It was adhered to, to a greater or lesser extent, by the Obama and Trump administrations. However, only the Biden administration ordered to put it at the center of the ideology of the American revival. It is noted in this article that structural reforms to transform the industrial sector, implemented with unprecedentedly high financial support from the federal authorities, are directed at creating new jobs, forming new industrial clusters and innovation centers. The main efforts are aimed at targeted manufacturing industries: pharmaceuticals, strategic metals and minerals, electric vehicles, and semiconductors. The use of nationally produced goods, reshoring and the formation of supply chains within the United States are proclaimed as the main preconditions for building a truly strong economy. The concept of “real energy independence” promoted by Biden, relies on renewable energy sources. A new impetus to the “greening” of the energy sector may be given to compensate companies investing in renewable energy sources for the costs associated with the forced replacement of foreign suppliers with national ones. Meanwhile, in effect, the attitude of Washington towards hydrocarbon energy remains fairly loyal, at least at the time of high fuel prices. In the domestic economic agenda, the priorities of industrial policy are being revived, aimed at achieving sole technological leadership. However, Washington’s achievements cannot be interpreted solely as the successes of Biden’s economic policy. An equally significant role was played by the expansion of domestic demand against the background of overcoming the consequences of the COVID-19 pandemic. The vector of further development is determined by the slogan “surpass China and the rest of the world”. The White House is trying to persuade American companies to build new manufacturing facilities in the US in order to compete with Chinese suppliers. However, against the background of China’s obvious desire to develop its own research and production base, the opportunities for American diсtate are narrowing. Import substitution is a slow process – “money speaks louder than economic patriotism”. Only a small portion of the business returns to the country, because of global instability, China is considered by a large part of American investors as a fairly safe haven. Washington’s attempts to squeeze China out of the supply chains have only accelerated the implementation of Beijing’s programs aimed at achieving technological selfsufficiency and “de-Americanization”. In recent years, the epicenter of the policy of technological containment, pursued by the United States against China, has shifted towards Russia. Our country is accused by Washington of deliberately orchestrating disruptions in the supply chains in energy and agricultural commodities markets. The experience of anti-Chinese actions, accumulated in the competitive struggle against companies and state organizations, and coordinated with US allies, is being used now against Russian exporters.

Implications of Korea from Changes in China’s Cross-Border E-Commerce Policy and Consumption Policy

Purpose Purpose - The purpose of this study is to analyze changes in China s cross-border e-commerce policy and consumption policy and the contents and characteristics of the process and to suggest implications for Korea. Design/Methodology/Approach This study collected and analyzed data provided by research institutes and institutions, China s cross-border e-commerce laws and consumption policy-related laws, and various policy data of each government department. Findings First, as China s cross-border e-commerce revitalization policy and consumption expansion policy are combined, related industries will grow rapidly in the future. Second, China s cross-border e-commerce policy will be led by the government and utilized as a part of the export increase policy under more sophisticated management and supervision. Third, China s consumption expansion policy is leading to active expansion of domestic demand in rural and urban areas as a means to achieve a consistently high economic growth rate. Fourth, the proportion of B2C in the trade structure of cross-border e-commerce is steadily increasing, and this is largely thanks to the change in China s consumption level and the government s policy support. Lastly, cross-border e-commerce will more expand and grow due to the “Measures to Promote Promotion of New Consumption” announced in 2021. Research Implications This study analyzed the contents and characteristics of each of China s cross-border e-commerce policy and consumption policy from two perspectives and tried to find commonalities between the two policies. In addition, based on the contents of this study, we presented implications by deriving what companies doing cross-border e-commerce business with China should prepare and prepare for.

Has the information and communication technology sector become the engine of China’s economic growth?

AbstractThis study examines the key drivers of the information and communication technology (ICT) sector's growth and the dynamics of its sectoral relationships in the Chinese economy, about which little is known, by using four updated and harmonized input–output tables for the period 2002–2017. The decomposition analysis shows that the ICT sector's growth was mainly driven by the expansion of export and domestic demand in the 2002–2007 period and by domestic demand expansion in the 2007–2012 and 2012–2017 periods. Furthermore, causative matrix analysis demonstrates that the ICT sector was consistently externalized throughout the study period, regardless of whether it received limited feedback from non‐ICT sectors' final demand in the 2002–2007 and 2012–2017 periods or substantial feedback in the 2007–2012 period. Finally, linkage analysis reveals that the ICT sector has had profound intersectoral linkages with both supply‐ and demand‐side effects in the economy. We conclude that the ICT sector has been the engine of economic growth in China and that stimulating its growth is a key tool for economic development.

A Study on the Reinforcement of Supply Chains Corresponding to Global Value Chain Reforms in the Automobile Parts and Component Industry

Global value changes continued to expand until the late 2000s. On the other hand, regional value chains have formed around major regional hubs due to the expansion of domestic demand in emerging economies, such as China, and strengthened trade protectionism since the global financial crisis. Such changes lead to the reorganisation of value chains, focusing on domestic markets (reshoring) or neighbouring countries (nearshoring). In particular, the importance of supply chain risk management has been highlighted following disruptions to the supply network due to the COVID-19 outbreak in December 2019. In this regard, major countries such as the USA and the EU are rapidly shifting to regional value chains for stable and sustainable production, rather than primarily aiming for production efficiency targeted at reducing costs. Industries in particular are more exposed to such supply chain risks under the existing structure and it now has become extremely important for businesses to take reaction to such risks. This is especially important for major industries in a country such as automobile or semiconductor manufacturing industries in South Korea. The aim of this study, therefore, is to establish the basis for the simultaneous growth of ports and linked industries by examining the existing structure of the global value chain for the automotive industry, which has a strong presence in South Korea’s domestic economy. In this regard, this research carries out a supply chain analysis focusing on the imports and exports of automotive parts. It also analyses the current structural risks and suggests risk management measures to secure a stable supply chain.

Analysis of the Structural Decomposition of the Textile-Clothing Industry in Bangladesh

Purpose: This paper aims to introduce the technology’s role and the final demand in the textile clothing industry’s growth path (TCI) of Bangladesh. Methodology: This study applies structural decomposition analysis in the input-output framework to measure Bangladesh’s textile–clothing industry structural changes. Structural decomposition analysis is also known as growth accounting in literature. Findings: This paper finds that, from 1975 to 1995, the TCI has grown due to huge domestic demand, from 1995 to 2015, this industry has grown due to export expansion. The technology was never a key factor over low–cost labor for the development of TCI in Bangladesh. Implications: For the sustainable development of the TCI in Bangladesh, domestic demand expansion is significant. Private and public policies should reflect this expansionary (domestic demand expansion) strategy. Originality: Previous studies on the TCI were mainly descriptive; there was no decomposition analysis in the input-output framework. Moreover, this paper decomposes the growth of the TCI into technical effect and final demand effect, which are new in the ready-made garment industry of Bangladesh.

The Role of the Real Estate Sector in the Structural Dynamics of the Chinese Economy: An Input–Output Analysis

AbstractMarket‐oriented housing reforms and the rapid urbanization process have led to spectacular growth in the Chinese real estate sector (RES). However, the changes in the role played by this sector in the structural dynamics of the Chinese economy have not been examined sufficiently. Accordingly, we analyze the intersectoral structural changes to the Chinese RES, its linkages with the rest of the economy, and its growth sources, using four Chinese input–output tables from 2002 to 2017. We depart from existing work on the RES by using the causative matrix approach and structural decomposition analysis, and obtain three main results. First, the RES, which received little non‐RES feedback during the 2002–2007 period, has subsequently received much more substantial feedback. Second, the impact of the RES on China's economic growth stems mainly from its forward linkages. Third, the growth in the RES has been driven mainly by domestic demand expansion. Our results highlight that the Chinese RES, which plays a key role in value chains, is highly dependent on its own final demand and a fall in its demand would impede economic development. An important implication of these results is that developing the national economy by stimulating the RES would not be as effective as developing the RES through stimulating the national economy.

REGIONAL ECONOMIC PROBLEMS: LABOR POTENTIAL OF THE FAR EAST DEVELOPMENT

The article deals with the problem of reducing the total population and reducing labor potential in the Far Eastern Federal District of the Russian Federation. Among the reasons that influence this process, a relatively low standard of living of the population is identified (lagging behind the average Russian population shares with incomes below the subsistence level, unemployment and access to social benefits), which contributes to an increase in migration outflows. Against the backdrop of a negative coefficient of natural profit, the migration of the able-bodied strata of the population poses a threat to the implementation of the state plan for the long-term social and economic development of the Far East. It has been suggested that the implementation of the “Far Eastern Capital” program is one of the ways to attract highly educated labor resources to the territory of the subjects of the Far-Eastern macroregion. The program envisages the allocation of financial resources that are applied by the population exclusively in the given territory in order to improve their living standards (housing and the opportunity to open their own business), as well as the quality of the educational (and hence labor) potential. The increase in population due to the solution of issues of material and social well-being will contribute to the expansion of domestic effective demand in the Far East. This, in turn, will lead to the successful functioning of the territories of advanced development and special zones of investment attractiveness.

ВІД ДЕПРЕСІЇ ДО АКТИВІЗАЦІЇ ЗРОСТАННЯ В ЕКОНОМІЧНІЙ І СОЦІАЛЬНІЙ СФЕРАХ УКРАЇНИ

The role of economic policy based on the neoliberal theory in depression of Ukraine’s economy is considered. It is proved that in Ukraine a plutocratic system has been formed, the basis of which is interpenetrating and mutually complementary interests of subjects of criminal economy and officials of power structures of all levels. Instead of the promised economy of general welfare and equality, the economy of absurdity and paradoxes is reproduced in society. Ukraine’s economy, once one of the most developed economies in the world, turned out to be the most backward in Europe, its people – the poorest, and its oligarchs – the richest (per US$100 thousand of GDP) in the world. There is no doubt that the reproduced system is unnatural and leads our society to a disaster. It is substantiated that Ukraine needs a decisive turn to a fundamentally new way of life, and consequently – to a change in the socio-economic structure of society. The answer to the existing problems and contradictions is to find a new system of theoretical knowledge, what is inherent in science (including social one). According to the author, to ensure the transition from depression to the growth of the national economy, our country needs to change the model of the market economy, with an emphasis on domestic economic development with a significant expansion of domestic demand, increased consumption and investment. This will contribute to economic sovereignty of the country and increase its export opportunities. An important place in this process should be given to the comprehensive plan for radical reconstruction of the national economy, with an emphasis on the re-industrialization of all spheres of the economy, rational allocation of productive forces and retraining of workers in accordance with the requirements of ITD. To do this, it is necessary to develop a long-term program of strategic development of the country, which should be based on the national interests.

Issues of Expansion of China Rural Resident Consumption

The international financial crisis on our economic development resulted in the inevitable impact on Chinese economy. In order to get rid of the impact, the expansion of domestic demand has been a crucial means of steady economic growth in China. However, the farmers over seven million account for a large proportion should be the main consumers in China. On the contrary, the current lack of domestic demand in China, which is mainly in rural consumption, is the lack of the critical issues of our efforts to expand domestic demand. This paper clarified the factors restricting China rural residents' consumption demand expansion, and on this basis explored the expansion of rural residents' consumption demand countermeasures. Empirical analysis was used to prove the low level of income of rural residents' constraints, and also to expose the fact that social security system was imperfect. Meanwhile, rural infrastructure restricted the consumption level of rural residents. The consumer market is an effective way to improve rural residents' consumption demand.

The governance of global value chain between Korea and China

Global value chains exhibit a variety of characteristics and impact players involved in a variety of ways, and they have become much more prevalent and elaborate in the past 10 to 15 years. Multiple participants that comprise a global value chain are spread over wider areas, the activities of these players need to be tightly integrated and systematically managed. Thus the governance system becomes an important instrument in global value chains. Taking LG Display’s new plant in China as a case study, this paper analyses the structure of LG Display global value chain, and explores the governance strategies of LG Display in the view of global value. Some suggestions are proposed such as enhancing cooperation with local government authority, fostering strategic coupling with domestic firms, utilizing the opportunity brought by the policy of Chinese domestic demand expansion, effective management of human resources and strengthening the R&D capability.

Chile, copper and resource revenue: A holistic approach to assessing commodity dependence

The first decade of the new millennium has ushered in with it booming commodity prices due mainly to high growth in East Asia. Copper prices in particular have soared 80% between 2001 and 2011, causing Chile, the world׳s largest copper producer, to reap massive windfalls. This paper provides an assessment of Chile׳s commodity dependence with a focus on the manner in which current flows of mining revenue promote sustainable development. The first part of the paper suggests Chile׳s status as a strong commodity producer could be complemented by efforts to achieve a more balanced growth trajectory that would include expansion of domestic demand brought about by rising labor productivity and rising wages and reduced dependence on export demand and foreign savings. We believe such an achievement would greatly promote the fair transfer of resource revenue from exhaustible sources to future generations. In the second part of the paper we provide an empirical assessment of sources and the destination of revenue derived from mineral exports. We focus on usage of revenue flows to government, multinationals in the form of profits and operating expenses, and workers. Our approach is intended to provide a more holistic and meaningful assessment of Chile׳s commodity dependence than what is normally found in the literature. We conclude that while the Chilean government clearly has provided future generations with revenue in the form of offshore sovereign wealth funds, most private resource revenue flows offshore in the form of remittances and profits to multinationals. There is limited use of private and public funds directed at enhancing domestic demand through productive investment.

Research on Agricultural Food Marketing Circulation Efficiency in China

This study aims to investigate the agricultural food marketing circulation efficiency in China using the factor analysis. The marketing efficiency of agricultural food products is related to the growth of farmer income and the expansion of domestic demand and directly affects the development of national economy. Based on the domestic and foreign reference, this study has established a new agricultural food product marketing efficiency evaluation index system. The factor analysis method was adopted to measure the Chinese agricultural food product marketing efficiency. The analysis results demonstrate that the residents' income and consumption level have great influence on the agricultural food products circulation. Hence, the strategy for improving the marketing efficiency of agricultural food products has been proposed in this study.

Financing Problems in China's Rural Areas

Solving the financing problem in rural areas and improving the level of economic development in rural areas become important guarantees for the expansion of domestic demand. This research, through studying the current situation of rural financing, pointed out the main factors restricting the financing in rural areas, such as high risk credit, slow income growth, high financing cost and difficult mortgage and guaranteed loans. Based on those, the author worked out the objectives and direction of China's rural financing reform, from two aspects of path selection of reform and innovation and specific embodiments for adjusting the overall reconstruction, and put forward some relevant countermeasures.

Payoffs from research and development along the Australian food value chain: a general equilibrium analysis

The payoffs and distribution of payoffs from research and development (R&D) along the food value chain depend on many interacting economic factors. To quantify these, we have developed a general equilibrium model of the Australian economy with detailed farming, processing and marketing information. We use the model to assess potential payoffs and distributions from various R&D scenarios that lead to demand expansion and productivity improvement. We find that productivity improvement caused by R&D is unambiguously beneficial to the whole economy while the benefits of export or domestic market demand expansion mainly accrue to the primary producers and processing industry, when the economy is at full employment. Also, productivity improvement from R&D on‐farm may benefit processors while improvements postfarm may benefit farmers.

Can We Prevent Boom-Bust Cycles During Euro Area Accession?

Euro-area accession caused boom-bust cycles in several catching-up economies. Declining interest rates and easier financing conditions fuelled spending and borrowing from abroad. Over time inflation deteriorated external competitiveness, turning the boom into a bust. We ask whether such a scenario can be avoided using macroeconomic tools that are available in the period of joining a monetary union: central parity revaluation, fiscal tightening or increased taxation. We find that exchange rate revaluation is the most attractive option. It simultaneously trims the expansion of output and domestic demand, reduces the cost pressure and ranks first in terms of welfare.